“Star India (P) Ltd. used to broadcast ‘Kaun Banega Crorepati’ between 22.1.2007 and 19.4.2007. The programme was sponsored by Bharti Airtel Limited, amongst others. During the telecast of this programme, a contest called ‘Har Seat Hot Seat’ was conducted, in which the viewers of KBC were invited to participate. An objective type question with four possible answers was displayed on the screen during each episode, and viewers who wished to participate were required to send in the correct answer, inter alia through SMS services, offered by Airtel, MTNL and BSNL, to a specified number. The winner for each episode was randomly selected out of the persons who had sent in the correct answers, and awarded a prize money of Rs. 2 Lakhs. There was no entry fee for the contest. However, it is not disputed that participants in the contest were required to pay Rs. 2.40 per SMS message to Airtel, which was higher than the normal rate for SMSes.
The mischief that Section 2(1)(r)(3)(a) of The Consumer Protection Act, 1986 seeks to address may be in two forms: first, the offering of gifts, prizes or other items with the intention of not providing them as offered, and secondly, the creation of the impression that something (i.e. a gift, prize or other item) is being given or offered free of charge in spite of the cost of the item actually being covered either fully or partly by the amount charged in the relevant transaction, as a whole. This would be, for example, where the vendor of a good or service deceptively increases the price of the good or service being sold, and covers the cost of a prize or gift offered for ‘free’ along with the good or service through such increased price.
In the instant matter, the controversy regarding the commission of an unfair trade practice pertains to the second part of the clause. It is evident that Star India was liable to pay the prize money irrespective of the profits earned by Airtel. Society of Catalysts has failed to establish any direct linkage between the increased SMS tariff rates and the prize money so as to show that the prize money was deceptively recovered in the guise of increased SMS rates charged to the participants. The averments on this aspect appear to be based on pure conjecture and surmise. We are of the view that there is no basis to conclude that the prize money for the HSHS contest was paid directly out of the SMS revenue earned by Airtel, or that Airtel and Star India had colluded to increase the SMS rates so as to finance the prize money and share the SMS revenue.”
– Hon’ble Justice Mohan M. Shantanagoudar, Star India (P) Ltd. v. Society of Catalysts, [Civil Appeal No. 6597 of 2008].